Friday, March 04, 2005

A big meal for Cisco ?

Cisco hinted this week that it intends to not only continue with its habit of making small acquisitions, but a big one is in the making. Who could that be ?

I can only think of 3 large possible targets :

Trend Micro (TMIC): Trend Micro already has a strong partnership with Cisco, and Cisco will have to make an entry into the anti-virus market eventually. What better time to do this than when Symantec is distracted trying to digest Veritas!

I did buy a few of Trend Micro earlier at around $25/share and they stand today at $47/share. At its current price Trend Micro is expensive, but any pullback that takes it to $35 or lower is a great entry point.

Nortel (NT): Rumors have surfaced a few times in the past about Cisco's interest in Notel. Today's appointment of a former Cisco top exec as Nortel's president now makes this a real possibility. Nortel is a good buy right now, especially since the restatements are now done.

Brocade (BRCD): Cisco has failed so far in winning a decent marketshare in storage area networking. It is time to buy instead of build!

Among the above, Nortel doesn't make a quality target. Brocade is still a good buy.

As mentioned in a previous post, investing mags have picked EMC and Network Applicance as possible targets for Cisco. I hope, for Cisco's sake, that they are wrong!

Network Appliance (NTAP) is a target, but for someone like HP.EMC cannot be a takeover target! It would be bad for both the acquirer and the target.